Auditor Report of N D Metal Industries Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of N D METAL
INDUSTRIES LIMITED , which comprise the Balance Sheet as at March 31,
2015, the Statement of Profit and Loss for the year then ended, and a
summary of significant accounting policies and other explanatory
information.

MANAGEMENT'S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

The Company's Management is responsible for the preparation of these
financial statements that give a true and fair view of the financial
position, financial performance of the Company in accordance with the
Accounting Standards notified under the Companies Act, 1956 (the Act)
read with the General Circular 15/2013 dated 13th September, 2013 of
the Ministry of Corporate Affairs in respect of Section 133 of the
Companies Act, 2013 and in accordance with the accounting principles
generally accepted in India. This responsibility includes the design,
implementation and maintenance of internal control relevant to the
preparation and presentation of the financial statements that give a
true and fair view and are free from material misstatement, whether due
to fraud or error.

AUDITORS' RESPONSIBILITY

Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.

An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor's judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company's preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the Company's
internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of the accounting
estimates made by management, as well as evaluating the overall
presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.

OPINION

We draw your attention to Note No-1 (Significant Accounting policies]
of clause 5 to 9 forming part Notes to accounts as we are unable to
comments on the same and subject to above in our opinion and to the
best our information and according to the explanations given to us ,
the aforesaid financial statements give the information required by the
Act in the manner so required and give a true and fair view in
conformity with the accounting principles generally accepted in India:

(a] In the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2015;

(b] In the case of the Statement of Profit and Loss, of the profit of
the Company for the year ended on that date; and

(c] In the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

As required by the Companies (Auditor's Report] Order, 2003 (the Order]
issued by the Central Government of India in terms of Section 227(4A]
of the Act, we give in the Annexure a statement on the matters
specified in paragraphs 4 and 5 of the Order.

As required by Section 227(3] of the Act, we report that:

a. We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;

b. In our opinion, proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books.

c. The Balance Sheet and the Statement of Profit and Loss dealt with by
this Report are in agreement with the books of account.

d. In our opinion, the Balance Sheet, and the Statement of Profit and
Loss comply with

Accounting Standards notified under the Act read with the General
Circular 15/2013 dated 13th September, 2013 of the Ministry of
Corporate Affairs in respect of Section 133 of the Companies Act, 2013,
except "

* Accounting Standard 15 (Employee benefits) provision of gratuity is
not made in accordance with Accounting Standard 15 (Revised.)

e. Note 19 relating to one time settlement(OTS) made with bank,
resulting in waiver of disputed interest for the year , whose benefit
has been credited by the company to the profit and loss account prior
to the fulfillment of the condition of settlement. Taking of such
credit which has not yet accrued to the company, has reduced the loss
by Rs.87,94,692/-and its equivalent effect on the reserve and surplus
of the company.

f. On the basis of the written representations received from the
directors as on March 31, 2015, taken on record by the Board of
Directors, none of the directors is disqualified as on March 31, 2015,
from being appointed as a director in terms of Section 274(l)(g) of the
Companies Act, 1956.

ANNEXURES TO AUDIT REPORT

N.D.METAL INDUSTRIES LIMITED

Annexure referred to in paragraph 3 of our report to the members of
M/S. N.D.METAL INDUSTRIES LIMITED as at 31st March, 2015, as required
by The Companies (Auditor's Report) Order, 2003 and amendments thereto
and according to the information and explanations given to us during
the course of audit & on the basis of such checks of the books &
records as were considered appropriate, we report that; r

i) In respect of its fixed assets:

(a) The Company has maintained proper records showing full particulars
including quantitative details and situation of Fixed Assets.

(b) As informed to us the management has physically verified the fixed
assets during the year in accordance with a program of verification,
which in our opinion provides for physical verification of the fixed
assets at reasonable intervals. According to the information and
explanations given to us no material discrepancies were noticed on such
verification.

(c) In our opinion and according to the information and explanations
given to us, the company has not made any substantial disposals during
the year.

ii) In respect of its inventories:

(a) The inventory has been physically verified by management during the
year. In our opinion the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management were reasonable and adequate in relation to
the size of the Company and the nature of its business.

(c) In our opinion and according to the information and explanations
given to us, the Company has maintained proper records of its
inventories and no material discrepancies were noticed on physical
verification.

iii) In respect of loans, secured or unsecured granted or taken by the
Company to /from companies firm or other parties covered in the
register, maintained u/s. 301 of the Companies Act 1956:

During the year under audit, company has not granted any loan to
company covered under register maintained u/s. 301 of the Companies act
1956 but there is an opening balance, in the respect of which maximum
balance outstanding is Rs. 4,98,10,152/- (previous year Rs.
4,98,10,152/-) and year-end balance is Rs.4,98,10,152/- (previous year
Rs. 4,98,10,152/-)

(a) In our opinion and according to the information and explanation
given to us, the terms and conditions are not prima facie prejudicial
to the interest of the company however we are unable to comment on the
same.

(b) As per the information and explanations given to us, the above
loans are repayable on demand and there is no repayment schedule.

(c) The company has taken loans from parties covered under register
maintained u/s. 301 of the Companies act 1956 in respect of which
maximum balance outstanding is Rs. 39,63,929 /- (previous year Rs.
39,63,929/-) year end balance is Rs. 39,63,929 /- (previous year Rs.
39,63,929/-).

(d) In our opinion and according to the information and explanation
given to us, the terms and conditions are not prima facie prejudicial
to the interest of the company.

(e) As per the information and explanations given to us, the above
loans are repayable on demand and there is no repayment schedule.

iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the company and nature of its business
with regards to purchase of inventory, fixed assets & sales of goods.

v) In respect of transactions entered in the register maintained in
pursuance of section 301 of the companies Act, 1956;

(a) To the best of our knowledge and belief and according to the
information and explanations given to us, transactions that needed to
be entered into the register have been so entered.

(b) Transactions made in pursuance of contracts or arrangements entered
into the register maintained under section 301 and exceeding the value
of five lacs rupees in respect of any party during the year, these in
our opinion and according to the information and explanations given to
us, have been made at prices which are reasonable having regard to
prevailing market prices at the relevant time.

vi) The company has not accepted any deposits from the public.
Therefore, the provisions of section 58A and 58AA of the companies act,
1956, and rules framed there under and the directives issued by the
Reserve Bank of India are not applicable.

vii) In our opinion and according to the information and explanations
given to us, the Company does not have internal audit system
commensurate with the size and the nature of its business.

viii) We have reviewed on test check basis and it has been informed
that company under process of maintaining of cost records prescribed by
the Central Government under Section 209(1) (d) of the Companies Act,
1956.

ix) According to the information and explanations given to us, the
provisions of the Provident Fund Act and Employees State Insurance Act
are not applicable to the Company. Our reporting is limited to the
amount of the deduction and the payment of the same. '

(a) The Company has been generally regular in depositing undisputed
statutory dues, including Investor Education and Protection Fund,
Income Tax, Sales Tax, Wealth-Tax, Service Tax, Customs Duty, Excise
Duty and any other statutory dues with the appropriate authorities
during the year except TDS which has not been deposited regularly with
appropriate authorities and there were significant delays in large nos.
of cases.

(b) There are no undisputed amount payable in respect of Income Tax,
Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and
any other statutory dues outstanding at the year-end for a period of
more than six months from the date they became payable as at 31st
March, 2015.

x) The company does not have accumulated losses at 31st March 2015
(Previous Year Rs. Nil/-) and the Company has not incurred cash losses
during the year under Audit but has not incurred cash loss in the
immediately_preceding year

xi) According to the information and explanations given to us, the
Company has not given any loans and advances on the basis of security
by way of pledge of shares, debentures and other securities.

xii) In our opinion and according to the explanation given to us, the
nature of activities of the company does not attract any special
statute applicable to Chit fund and Nidhi / Mutual benefit fund/
Societies.

xiii) The Company is not dealing or trading in shares, Securities,
debentures and other Investment, Accordingly, the provisions clause
4(xiv) of paragraph 4 of the companies (Audited report) Order, 2003 are
not applicable to the company.

xiv) According to the information and explanations given by management,
the Company is not dealing or trading in shares, securities, debentures
and other investments.

xv) According to the information and explanations given to us, the
company has not given any guarantee for loans taken by others from bank
or financial institutions.

xvi) In our opinion, and according to the information and explanations
given to us, and on overall basis, the Term Loans has been applied for
the purpose for which it is obtained.

xvii) According to the information and explanation given to us on the
basis of overall examination of the books of the company, we are of the
opinion that the Company has not utilized short term funds for Long
term Investments.

xviii) The Company has not made preferential allotment to the parties
and Companies Covered in the register maintained u/s 301.

xix) The Company has not issued any debentures during the year.
Therefore the provision of clause (xix) of paragraph of the companies
(Auditor's Reports) Order, 2003 is not applicable to the company.

xx) The Company has not raised any money by public issue during the
year. Therefore the provision of clause (xx) of paragraph of the
companies (Auditor's Reports) Order, 2003 is not applicable to the
company.

xxi) To the best of our knowledge and belief and according to the
information and explanations given to us, no fraud on or by the Company
was noticed or reported during the year ended 31st March, 2015.

For SUDESH & ASSOCIATES
Chartered Accountants
Firm Regn.No.l31970W

CA. Sudesh R. Shetty
(Proprietor)
M.No. 103550

Place: Mumbai
Date: 2nd September, 2015.

Mar 31, 2014

We have audited the accompanying financial statements of N.D.METAL
INDUSTRIES LIMITED, which comprise the Balance Sheet as at March 31,
2014, the Statement of Profit and Loss for the period then ended, and a
summary of significant accounting policies and other explanatory
information.

MANAGEMENT''S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

The Company''s Management is responsible for the preparation of these
financial statements that give a true and fair view of the financial
position, financial performance of the Company in accordance with the
Accounting Standards notified under the Companies Act, 1956 (the Act]
read with the General Circular 15/2013 dated 13th September, 2013 of
the Ministry of Corporate Affairs in respect of Section 133 of the
Companies Act, 2013 and in accordance with the accounting principles
generally accepted in India. This responsibility includes the design,
implementation and maintenance of internal control relevant to the
preparation and presentation of the financial statements that give a
true and fair view and are free from material misstatement, whether due
to fraud or error.

AUDITORS'' RESPONSIBILITY

Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.

An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the Company''s
internal control. An audit also includes evaluating the appropriateness
of accounting policies used and thereasonableness of the accounting
estimates made by management, as well as evaluating the overall
presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.

OPINION

We draw your attention to Note no.l (Significant Accounting Policies)
of clause 5 to 9 forming part of Notes to Accounts as we are unable to
comments on the same and subject to above in our opinion and to the
best of our information and according to the explanations given to us,
the aforesaid financial statements give the information required by the
Act in the manner so required and give a true and fair view in
conformity with the accounting principles generally accepted in India:

(a) In the case of the Balance Sheet, of the state of affairs of the
Company as at March 31,2014;

(b) In the case of the Statement of Profit and Loss, of the loss of the
Company for the period ended on that date and

(c) In the case of Cash Flow Statement of cash flows for the year ended
on that date.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

As required by the Companies (Auditor''s Report) Order, 2003 (the Order)
issued by the Central Government of India in terms of Section 227(4A)
of the Act, we give in the Annexure a statement on the matters
specified in paragraphs 4 and 5 of the Order.

As required by Section 227(3) of the Act, we report that:

a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;

b) In our opinion, proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books;

c) The Balance Sheet, and the Statement of Profit and Loss dealt with
by this Report are in agreement with the books of account;

d) In our opinion, the Balance Sheet, and the Statement of Profit and
Loss comply with Accounting Standards notified under the Act read with
the General Circular 15/2013 dated 13th September, 2013 of the Ministry
of Corporate Affairs in respect of Section 133 of the Companies Act,
2013, except

- Accounting Standard 15 (Employee benefits) provision of gratuity is
not made in accordance with accounting standard 15 (Revised)

e) Note 25 relating to one time settlement (OTS) made with lender,
resulting in waiver of disputed interest for the year, whose benefit
has been credited by the Company to the profit and loss account prior
to the fulfillment of the condition of settlement. Taking of such
credit which has not yet accrued to the Company, has reduced the loss
by Rs.4,59,66,076/- and its equivalent effect on the reserve and
surplus of the Company.

f) On the basis of the written representations received from the
directors as on 31st March, 2014 taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March,
2014, from being appointed as a director in terms of Section 2 74(1)
(g) of the Companies Act, 1956.

ANNEXURES TO AUDIT REPORT

N.D.METAL INDUSTRIES LIMITED

Annexure referred to in paragraph 3 of our report to the members of
M/S. N.D.METAL INDUSTRIES LIMITED as at 31st March, 2014, as required
by The Companies (Auditor''s Report) Order, 2003 and amendments thereto
and according to the information and explanations given to us during
the course of audit & on the basis of such checks of the books &
records as were considered appropriate, we report that;

i) In respect of its fixed assets;

(a) The Company has maintained proper records showing full particulars
including quantitative details and situation of Fixed Assets.

(b) As informed to us the management has physically verified the fixed
assets during the year in accordance with a program of verification,
which in our opinion provides for physical verification of the fixed
assets at reasonable intervals. According to the information and
explanations given to us no material discrepancies were noticed on such
verification.

(c) In our opinion and according to the information and explanations
given to us, the company has not made any substantial disposals during
the year.

ii) In respect of its inventories:

(a) The inventory has been physically verified by management during the
year. In our opinion the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management were reasonable and adequate in relation to
the size of the Company and the nature of its business.

(c) In our opinion and according to the information and explanations
given to us, the Company has maintained proper records of its
inventories and no material discrepancies were noticed on physical
verification.

iii] In respect of loans, secured or unsecured granted or taken by the
Company to /from companies firm or other parties covered in the
register, maintained u/s. 301 of the Companies Act 1956:

During the year under audit, company has granted loan to company
covered under register maintained u/s. 301 of the Companies act 1956
in the respect of which maximum balance outstanding is Rs. 4,98,10,152/-
(previous yearRs. 4,98,10,152/-] and year-end balance is Rs. 4,98,10,152/-
(previous yearRs. 4,98,10,152/-]

(a] In our opinion and according to the information and explanation
given to us, the terms and conditions are not prima facie prejudicial
to the interest of the company however we are unable to comment on the
same.

(b] As per the information and explanations given to us, the above
loans are repayable on demand and there is no repayment schedule.

(c] The company has taken loans from parties covered under register
maintained u/s. 301 of the Companies act 1956 in respect of which
maximum balance outstanding is Rs. 39,63,929 /- (previous yearRs.
39,612 year end balance is Rs. 39,63,929 /- (previous year Rs.
39,63,929/-).

(d) In our opinion and according to the information and explanation
given to us, the terms and conditions are not prima fade prejudicial to
the interest of the company.

(e) As per the information and explanations given to us, the above
loans are repayable on demand and there is no repayment schedule.

iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the company and nature of its business
with regards to purchase of inventory, fixed assets & sales of goods.

v) In respect of transactions entered in the register maintained in
pursuance of section 301 of the companies Act, 1956;

(a) To the best of our knowledge and belief and according to the
information and explanations given to us, transactions that needed to
be entered into the register have been so entered.

[b] Transactions made in pursuance of contracts or arrangements entered
into the register maintained under section 301 and exceeding the value
of five lacs rupees in respect of any party during the year, these in
our opinion and according to the information and explanations given to
us, have been made at prices which are reasonable having regard to
prevailing market prices at the relevant time.

vi) The company has not accepted any deposits from the public.
Therefore, the provisions of section 58A and 58AA of th''e companies
act, 1956, and rules framed there under and the directives issued by
the Reserve Bank of India are not applicable.

vii) In our opinion and according to the information and explanations
given to us, the Company does not have internal audit system
commensuratewith the size and the nature of its business.

viii) We have reviewed on test check basis and it has been informed
that company under process of maintaining of cost records prescribed by
the Central Government under Section 209(1) (d) of the Companies Act,
1956.

ix] According to the information and explanations given to us, the
provisions of the Provident Fund Act and Employees State Insurance Act
are not applicable to the Company. Our reporting is limited to the
amount of the deduction and the payment of the same.

(a) The Company has been generally regular in depositing undisputed
statutory dues, including Investor Education and Protection Fund,
Income Tax, Sales Tax, Wealth-Tax, Service Tax, Customs Duty, Excise
Duty and any other statutory dues with the appropriate authorities
during the year except TDS which has not been deposited regularly with
appropriate authorities and there were significant delays in large nos.
of cases.

(b) There are no undisputed amount payable" in respect of Income Tax,
Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and
any other statutory dues outstanding at the year-end for a period of
more than six months from the date they became payable as at 31st
March, 2014.

x] The company does not have accumulated losses at 31st March 2014
(Previous Year Rs. Nil/-) and the Company has incurred cash losses during
the year under Audit but has incurred cash loss in the immediately
preceding year.

xi) According to the information and explanations given to us, the
Company has not given any loans and advances on the basis of security
by way of pledge of shares, debentures and other securities.

xii) In our opinion and according to the explanation given to us, the
nature of activities of the company does not attract any special
statute applicable to Chit fund and Nidhi / Mutual benefit fund/
Societies.

xiii] The Company is not dealing or trading in shares, Securities,
debentures and other Investment, Accordingly, the provisions clause
4(xiv] of paragraph 4 of the companies [Audited report] Order, 2003 are
not applicable to the company,

xiv] According to the information and explanations given by management,
the Company is not dealing or trading in shares, securities, debentures
and other investments.

xv] According to the information and explanations given to us, the
company has not given any guarantee for loans taken by others from bank
or financial institutions.

xvi] In our opinion, and according to the information and explanations
given to us, and on overall basis, the Term Loans has been applied for
the purpose for which it is obtained.

xvii] According to the information and explanation given to us on the
basis of overall examination of the books of the company, we are of the
opinion that the Company has not utilized short term funds for Long
term Investments.

xviii] The Company has not made preferential allotment to the parties
and Companies Covered in the register maintained u/s 301,

xix] The Company has not issued any debentures during the year.
Therefore the provision of clause [xix] of paragraph of the companies
[Auditor''s Reports] Order, 2003 is not applicable to the company.

xx] The Company has not raised any money by public issue during the
year. Therefore the provision of clause [xx] of paragraph of the
companies [Auditor''s Reports] Order, 2003 is not applicable to the
company.

xxi] To the best of our knowledge and belief and according to the
information and explanations given to us, no fraud on or by the Company
was noticed or reported during the year ended 31st March, 2014.

For SUDESH & ASSOCIATES
Chartered Accountants
Firm Regn.No.:131970W

CA.Sudesh R. Shetty
(Proprietor)
M.No. 103550

Place: Mumbai
Date: 2nd September, 2014

Mar 31, 2010

1. We have audited the attached Balance Sheet of V.D.MCTAL INDUSTRIES
LIMITED as at 31st March. 2010 and the Profit* Loss Account and Cash
flow statement annexed thereto for the year ended on thai date. These
financial statements are the responsibility of the Companys
Management. Our responsibility is to express an opinion on these
financial statements based on our audit.

2.We conducted our audit in accordance with auditing Standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are froe from any material misstatement, Audit
includes examining, on a test basis, evidence supporting the accounts
and disclosures in the financial statements. An Audit also includes
assessing the accounting principles used and significant estimates made
by Management, as well as evaluating the overall financial statement
presentation, We believe that Our audit provides a reasonable basis for
our opinion.

3. As required by the Companies (Auditors Report) Order. 2003. issued
by the Central Government of India in terms of Section 22? (4 A) of the
Companies Act 1956. we annexed hereto a statement on the matters
specified in paragraph 4 of the said order.

4. Further to our comments in the statement referred to in paragraph 3
above, wc state that:

a) We have obtained all die information anil explanaation, which to the
best of our knowledge and belief were necessary for the purpose of our
audit. In our opinion proper Books of Account AS required by the law
have been kept by the Company so far as appears from our examination of
such Boob

b) The Balance Sheet, Profit & Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the Books of" Account.

c) In our opinion, the said Balance Sheet, Profit & Loss Account und
Cash Flow Statement comply with the accounting standards referred to in
sub-section (3C) of Section 211 of the Companies Act, 1956 except
Accounting Standard IS Employee Benefits, "provision of gratuity, h
not made in accordance with Accounting Standard IS (Revised).

d) On the husis of the written representations received from the
Directors and taken on record by the Board of Directors, wc report that
none of the directors is disqualified as on 3ln March, 2010 from being
appointed as a director in terms of clause )g) of sub section (I) of
section 274 of the Companies Act. 1956- As regards Government Nominee
Directors, dwy are exempted from the provisions of Section 274 (l)(g)in
view of general circular issued by the Department of Company Affairs.

Subject (o above, in ouf opinion and to the best of our information and
according to the explanation given to us. the Balance Sheet, Profit &
UtfS Account and Cash Flow Statement read together with the significant
accounting policies and the other notes thereon give the information
required by die Companies Act ^56 in the manner so required and give a
true and fair view:

(i) In the case of Itw: Balance Sheet, of the State of Affairs of the
Company as 31st March. 2010, and

(ii) In the case of Profit & Loss Account, of the "Loss" for the year
ended on that date and

(iii) In the case of cash flow stutemcnt of the cash How for the year
ended on that date

Annexure to Auditors Report ND Metal Industries Ltd

i) In respect of Us fixed assets:

(a) The Company has maintained proper records showing full particulars
including quantitative details and situation of Fixed Assets.

(b) As informed to us the management has physically verified the fixed
assets during the yeaf in accordance with a program of verification,
which in our opinion provides lor physical verification of the fixed
assets at reasonable intervals. According tÃÂ» the information and
explanations given to us no material discrepancies were noticed on such
verification.

(c) In our opinion and according to the information and explanations
given to us, the company has not made any substantial disposals during
the year.

ii) In respect of its inventories:

(a) The inventory has been physically verified by the management during
the year. In our opinion, die frequency of verification is reasonable.

(b) In our opinion and according to the information and explanations
given to us. (he procedures of physical verification of inventories
followed by the management were reasonable and adequate in relation to
the size of the Company and the nature of its business.

(c> In our opinion and according to the information and explanations
given to us, the Company has maintained proper records of its
inventories and no material discrepancies were noticed on physical
verification.

iii) In respect of took secured or unsecured granted or taken by the
Company to /from companies firm or other parties covered in the
register, maintained ws. 301 of the Companies Act 1956:

(a) The company has given loan to two company covered under register
maintained u/s. 301 of the Companies act 1956, during rhe year. In
respect of the said loan the maximum amount outstanding at any time
during the year is Rs. 3,55,55.000/- and the yearend balance is Rs.
3,52.97,000/-.

(b) According to the management, the terms and conditions of the loans
iriven hv the company are not prima facie prejudicial to the interest
of the company however we are unable to comment on the same.

(c) The Principal amounts are repayable on demand and there is no
repayment schedule. the loans are interest free.

(d) In rcsped of the said loans the same are repuyublc on demand and
therefore the question of overdue amounts does not arise.

(e) The company has taken loans from two parties covered under register
maintained u/s. 301 of the Companies act 1056 in respect of which
maximum balance outstanding is Rs. 53,13.929 and year end balance is
Rs. 39,63.29--.

(f) In our opinion and according to the information and explanation
given to us, rhe terms and conditions arc not prima facie prejudicial
to the interest of the company.

(g) As per the information and explanations given to us, the above
loans arc repayable on demand and there is no repayment schedule.

iv) In our opinion and according to the information and explanations
given to us, there arc adequate internal control procedures
commensurate with the size of the company and nature of its business
with regards to purchase of inventory, fixed assets & sales of goods.

v) In respect of transactions entered in the register maintained in
pursuance ofscetion 301 of the companies Act. 1956;

(a) To the best of our knowledge and belief and according to the
information and information and explanations given to us, transactions
that needed to be entered into the register have been so entered.

(b) Transactions made in pursuance of contracts or arrangements entered
into the register maintained under section 301 and exceeding the value
of five lac rupees in respect of any party during the year, these in
our opinion and according to the information and explanations given to
us, have been made at prices which arc reasonable having regard to
prevailing market prices at the relevant lime.

vi> The company has not accepted any deposits from the
public.Therefore, the provisions of section 58A and S8AA of the
companies act 1956. and rules framed there tender and the directives
issued by the Reserve Bank of India are not applicable.

vii) In our opinion until according in the information and explanation
given to us, the Company doe.% not have internal audit system SO as to
be commensurate with the size and ilie nature of its business.

viii) We have been informed that the maintenance of cost records has
not been prescribed by the Central Government under Section 2fr9( 1)
(d) of the Companies Act, 1956.

ix) According to the information and explanations given to us, the
provisions of die Provident fund Act and Employees Suite Insurance Act
arc not applicable to the Company. Our reporting is limited to the
amount of the deduction and the payment of the same.

(a) The Company hart been generally regular in depositing undisputed
statutory dues. including Investor Education and Protection Fund,
Income Tax. Sales Tax, Wealth- Tax, Customs Duly, Excise Duly and any
other statutory dues with the appropriate authorities during the year.

(b) There are no undisputed amount payable in respect of Income Tax
AVealih Taw Service Tax. Sales Tax / Cess.1 Custom Dirty / and Excise
Duly outstanding at the year end for a period of more than six months
from the dale they became payable as on3l.03.20IO.

x) The company docs not have accumulated losses at 3tst March 2010. The
company has

incurred during the year the loss of Rs. 84,69,326/- including the cash
losses of Rs. 50,40.578- during the year under Audit and also has
incurred the loss in the immediately preceding year.

xi) Rased on our audit procedures and on die information and
explanations given by die management, we are of the opinion dial the
company has not defaulted in die repayment of dues to financial
institutions, banks and debenture-holders.

xii) According to the information and explanations given to us, the
Company has not given any loans and advances on the fowls of security
by way of pledge of shares, debentures and other securities.

xiii) In our opinion and according to the explanation given to us, the
nature of activities of the company docs not attract any special
statute applicable to Chit fund and Midhi / Mutual benelit fund.
Societies.

xiv) The Company is not dealing or trading in shares. Securities,
debentures and other Investment. Accordingly, the provisions clause
4{xiv) of paragraph 4 of the companies (Audited report) Order, 2003 arc
not applicable to die company.

XV) According to the information aid explanations given to us, the
company has given guarantee for loans taken by associated company or
other* from bank of financial institution.

xvi) The Company has availed Term Loans and as per the information
and on explaination given to us, nSc loan tnkcn has utilized for the
purpose for which die loans were taken.

xvii) According to the information and explanation given to us on the
basis of overall examination of the books of (he company, we are of the
opinion that the Company has no) utilized short term funds for
repayment ofborrowings. Acquisition of fixed assets and investments.

xviii) The Company has not made any preferential allotment io the
panics and Company Covered in the reg. maintains ids ; 11:

xix) The Company has not issued any debentures during the year.
Therefore the provision of clause (xix) of paragraph of the companies
(Auditors Reports) Order, 2003 is not applicable to the company.

xx) The Company has not raised any money by public issue during the
year. Therefore the provision of clause (xx) of paragraph of the
companies (Auditors Reports) Order. 2003 is not applicable to the
company.

xxi) To the best of our knowledge and belief and according io the
information and explanations given to us, no fraud on or by the Company
was noticed or reported during the year.